Activision Blizzard and the board of directors is being sued by one of it’s shareholders over alleged Securities Exchange Act violations in the plan proposed for it’s sale to Microsoft. Kyle Watson filed the suit in California on Thursday. His lawyers said that Activision Blizzard’s plan for the sale was “unfair for a number of reasons,” one of which is that the board seeks to “procure for themselves and senior management significant and immediate benefits.”
The lawsuit claims that the sale is not in the best interest of the game publisher or its shareholders, but “will produce lucrative benefits for the [Activision Blizzard’s] officers and directors.” Also referenced were potential payouts to some top executives like CEO Bobby Kotick, who is set to receive $15 million if he gets fired.
It is also alleged by Watson’s lawyers that Activision Blizzard’s Feb. 18th SEC filing violates the Exchange Act, calling it “materially misleading and incomplete.” Watson seeks the court to order Activision Blizzard to release a new SEC preliminary proxy statement that has more facts and no “untrue statements.” Should the proposed sale go through, Watson is also seeking “recissory damages.”
This is the second lawsuit that Activision Blizzard is facing from its shareholders. In a case filed in 2021 of last year, the lawsuit claimed that the way the corporate leaders handled the sexual harassment and discrimination reports resulted in the company’s shares dropping in value.
A spokesman for Activision Blizzard has responded to the lawsuit with the following statement:
We disagree with the allegations made in this complaint and look forward to presenting our arguments to the Court.
The acquisition of Activision Blizzard
is the largest in Microsoft’s history with a total cost of $68.7 billion. Pending approval, the deal is expected to close by the end of June of 2023.
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